Correlation Between Westlake Chemical and First Trust
Can any of the company-specific risk be diversified away by investing in both Westlake Chemical and First Trust at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Westlake Chemical and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westlake Chemical Partners and First Trust Exchange Traded, you can compare the effects of market volatilities on Westlake Chemical and First Trust and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Westlake Chemical with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westlake Chemical and First Trust.
Diversification Opportunities for Westlake Chemical and First Trust
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Westlake and First is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Westlake Chemical Partners and First Trust Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Exchange and Westlake Chemical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Westlake Chemical Partners are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Exchange has no effect on the direction of Westlake Chemical i.e., Westlake Chemical and First Trust go up and down completely randomly.
Pair Corralation between Westlake Chemical and First Trust
Given the investment horizon of 90 days Westlake Chemical is expected to generate 1.02 times less return on investment than First Trust. In addition to that, Westlake Chemical is 5.26 times more volatile than First Trust Exchange Traded. It trades about 0.04 of its total potential returns per unit of risk. First Trust Exchange Traded is currently generating about 0.24 per unit of volatility. If you would invest 1,886 in First Trust Exchange Traded on November 19, 2024 and sell it today you would earn a total of 146.50 from holding First Trust Exchange Traded or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 33.67% |
| Values | Daily Returns |
Westlake Chemical Partners vs. First Trust Exchange Traded
Performance |
| Timeline |
| Westlake Chemical |
| First Trust Exchange |
Westlake Chemical and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westlake Chemical and First Trust
The main advantage of trading using opposite Westlake Chemical and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westlake Chemical position performs unexpectedly, First Trust can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in First Trust will offset losses from the drop in First Trust's long position.| Westlake Chemical vs. Valhi Inc | Westlake Chemical vs. Huntsman | Westlake Chemical vs. Lsb Industries | Westlake Chemical vs. Green Plains Renewable |
| First Trust vs. Columbia Diversified Fixed | First Trust vs. Doubleline Etf Trust | First Trust vs. Virtus Newfleet ABSMBS | First Trust vs. Vident Core Bond |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |